Asian shares mostly decline echoing US slide on rate worries

Tokyo, Sept. 26 (BNA): Most Asian stocks fell on Monday, reflecting pessimism about weakness on Wall Street as pressure from central banks around the world to curb inflation weighs on investor sentiment.

Japan’s Nikkei 225 index fell 2.1% in morning trading to 2,6587.08. Australia’s S&P/ASX 200 fell 1.3% to 6,489.80. South Korea’s Kospi fell 2.4% to 2,234.15. Hong Kong’s Hang Seng rose 0.6% to 18039.95, while the Shanghai Composite rose 0.1% to 3092.30.

“Momentum may follow additional selling on Wall Street into the end of last week, with the strength of the US dollar weighing on Asian indices,” Yeap Jun Rong, market analyst at IG in Singapore, said in a report. Press (AP).

The recent moves by the US Federal Reserve and other central banks around the world are designed to raise interest rates to curb high inflation, but they also threaten to stagnate, if rates rise too much or too quickly.

Wall Street ended last week with a broad sell off, leaving the major indexes with their fifth loss in six weeks. Data on European business activity was discouraging, and a separate report indicated that US activity was still shrinking, albeit not as badly as in previous months.

The S&P 500 fell 1.7% on Friday, to 3,693.23, its fourth consecutive decline. The Dow, which at one point plunged more than 800 points, lost 486.27 points, or 1.6%, to close at 29590.41. The Nasdaq index fell 1.8 percent to 10,867.93 points.

Small-cap stocks have fared worse. The Russell 2000 index fell 2.5% to close at 1,679.59.

More than 85% of stocks in the S&P 500 closed in the red, with tech companies, retailers and banks among the biggest weights on the benchmark index.

Last week, the Fed raised the benchmark interest rate, which affects many consumer and business loans, to a range of 3% to 3.25%. It was close to zero at the beginning of the year. The Fed also issued forecasts that the benchmark interest rate could reach 4.4% by the end of the year, a full point higher than was projected in June.

In energy trading on Monday, benchmark US crude rose 12 cents to $78.86 a barrel in electronic trading on the New York Mercantile Exchange. US crude oil prices fell 5.7% on Friday to their lowest levels since early this year on concerns that a weaker global economy will burn less fuel.

Brent crude, the international benchmark, rose 6 cents to $86.21 a barrel.

In currency trading, the recent rally in the US dollar has been a concern, raising concerns about declining profits for US companies with overseas businesses, and putting financial pressures on much of the developing world.

When the dollar approached 146 yen last week, the Bank of Japan intervened. The dollar has been trading at around 143 yen since then.

On Monday, it rose to 143.75 yen from 143.32 yen. The cost of the euro was 96.59 cents, down from 96.88 cents.

HF